Global financial crisis has had a great impact on the Indian economy. Two famous names of Wall Street i.e., Lehman Brothers and Merrill Lynch have disappeared. This as well as the subprime crisis has also led to the problem of shortage of money supply in the Indian financial system. The Indian economy cannot remain aloof from the same situation causing it to suffer by bearish trend. This article analyzes the impact of global financial crisis on the major sectors of the economy and also enumerates strategies that can be implemented to combat this effect.

For the past three quarters of the century, global financial markets have never witnessed such a financial unrest on such a large scale. Recent events in the US market have placed the US subprime mortgage industry in the limelight. Even the bailout package of $700 bn of US banks was not enough to turn the surge in global financial markets. The efforts of six of the world's central banks to combat this turmoil by joining hands to release hundreds of billions into the system have turned void.

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